Practical examples of ESG strategies that make a difference in businesses
Have you ever wondered how companies truly benefit from implementing ESG strategies? Beyond theory and dry statistics, how does ESG success manifest in the real business world? Sustainability, as we understand it, should and can translate into tangible business success.
Let’s start with a statistic from the asset manager Fidelity, comparing the performance of companies with ESG strategies to similar firms without ESG strategies:
ESG and Company Performance
Figure 1: ESG and performance in 7 charts
This graphic powerfully illustrates how ESG implementation is reflected in real numbers. For example, note the significant outperformance of companies with ESG strategies compared to traditional management in sectors like technology and healthcare. In almost every industry analyzed, sustainable companies have outpaced their traditional competitors. This underscores that sustainable business practices are not a cost driver but a profit generator.
Success in Practice
here are numerous, often lesser-known, examples of sustainably successful small and medium-sized enterprises (SMEs). Here are two very different companies we’d like to highlight:
VAUDE: The German outdoor clothing manufacturer VAUDE has long been a successful pioneer in its industry. The highlight from the last fiscal year: since 2022, the company has been climate neutral. While reducing its CO2 emissions by another 5%, the company simultaneously achieved a 13% increase in revenue.
SONNENTOR: The Austrian pioneer Sonnentor impresses with its sustainable corporate philosophy, which is reflected in organic farming, fair partnerships, resource-saving production, and circular economy projects. As a result, the company is a role model in the organic industry. At the same time, Sonnentor continues to grow with an impressive equity ratio of 68%.
And there are numerous other examples from Austria.
Challenges
You might realize that ESG is more than just a response to regulatory requirements – it’s a strategic decision that can give your company a decisive and long-term competitive advantage.
However, integrating ESG into the business concept also comes with challenges. A key criticism in the ESG space for a long time was the subjectivity and lack of transparency of underlying data. This prompted the EU to introduce a unified and transparent regulation for ESG reporting.
Another negative development is Greenwashing. In simple terms, this means that companies portray their products and services as “greener” than they really are. Unfortunately, there are many international examples of this.
Due to a lack of legal requirements, greenwashing has increased significantly in recent years. The EU is now planning to combat this with strict legislation. A new law proposes that companies must make their environmental claims independently verifiable, or they risk hefty fines of up to 4% of their annual revenue.
What’s Next?
It is clear that the influence of sustainability and ESG on the corporate world will continue to grow. This is a journey that goes far beyond simply “complying with laws” and aims for the responsible management of our planet’s finite resources. Every entrepreneur must understand that this is a key factor in securing their company’s long-term viability.
When implemented correctly, ESG becomes a long-term growth driver that creates a genuine competitive edge on multiple levels. We’ll explore more on this in our next blog post.
We understand your challenges and have developed the right tools to guide your company through this long-term transformation safely and successfully. Take advantage of the opportunities ESG offers and ensure a sustainable future for your company.
